(Updates)

** Shares of Australia's IDP Education rise as much as 5.8% to A$12.52

** Stock hits highest since Dec. 10 and is set for strongest session since late August

** Jefferies upgrades IDP Education to "hold" from "underperform", driven by recovery in the U.K. market and promising performance in China

** Sees signs of recovery in the UK student visa numbers, which, after a period of decline are set to positively impact the education counsellor's business

** Jefferies highlights company's China IELTS initiative, an English proficiency test, as outperforming expectations and potentially boosting revenue

** Brokerage flags company's plans to diversify in Spain, Germany and other countries to have a short-term but insignificant impact

** Despite policy challenges, brokerage sees IEL's stock finding support around A$10/shr

** Shares of company down 40.9%, YTD, as of the last close

(Reporting by Kumar Tanishk in Bengaluru; Editing by Chris Reese)

((Tanishk.Kumar@thomsonreuters.com;))